M&M enters into strategic alliance with Ford to explore collaboration on electric vehicles

Mahindra & Mahindra, Ford team up to explore collaboration on electric vehicles

MUMBAI: Mahindra & Mahindra has entered into a strategic alliance with US car major Ford Motor Company to explore cooperation in the sphere of products, technologies and distribution including future mobility program, connected vehicle projects, electrification of cars amongst other areas.

The joint statement issued by the company stated that teams from both companies will collaborate and work together for a period of up to three years. And any further strategic cooperation between the two companies will be decided at the end of that period.

In a statement to Bombay Stock Exchange, Mahindra & Mahindra stated that the tie-up could facilitate Mahindra's expansion into other global emerging markets. And the potential of talks are wide ranging right from for shared investment, economies of scale, technology sharing and higher efficiency in conventional areas like product development, sourcing and distribution as also in new emerging growth areas of mobility, electrification and internet of vehicles or connected cars.

Speaking on the alliance, Pawan Goenka, managing director, Mahindra and Mahindra Ltd said the changes facing the automotive industry globally are triggered by the accelerated rise of new technologies, sustainability policies and new models of urban shared mobility.

"Given these changes Mahindra sees the need to anticipate new market trends, explore alternatives and look for ways to collaborate even as we compete and build powerful synergies that will allow rapid exploitation of the exciting new opportunities. Today’s announcement builds on the foundation laid through our past partnership with Ford and will open opportunities for both of us,” said Goenka.

This is yet another attempt by US car maker to look at options of making money in the market, where it has so far invested over $2 billion, it is yet to make money. Despite two decades of presence in India, Ford India has a sub-optimal share of less than 3% and majority of its output from India is directed towards overseas market - enabling Ford to utilise 60% of its installed capacity of 4.4 lakh units. The company's production in FY-17 grew over 28% led by exports to 2.52 lakh units.

On the alliance, Jim Farley, Ford executive vice president and president of Global Markets said, “Ford is committed to India and this alliance can help us deliver the best vehicles and services to customers while profitably growing in the world’s fifth largest vehicle market.”

The memorandum of understanding signed between Ford & Mahindra will also explore ways of making electrification affordable in the times to come.

“The memorandum of understanding we have signed today with Mahindra will allow us to work together to take advantage of the changes coming in the auto industry. The enormous growth potential in the utility market and the growing importance of mobility and affordable battery electric vehicles are all aligned with our strategic priorities,” added Farley.

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